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Presstek Reports a Drop in Revenue for Q2 2012

Thursday, August 09, 2012

Press release from the issuing company

Presstek, Inc., a leading supplier of digital offset printing solutions to the printing and communications industries, today reported financial and operating results for the second quarter ended June 30, 2012. The Company reported total revenue of $29.7 million compared to $31.4 million in the second quarter of 2011.

The Company generated positive adjusted EBITDA of $0.8 million for the quarter, an increase of $0.4 million from the prior year. The Company had an operating loss of $0.3 million in the second quarter of 2012 versus an operating loss of $1.2 million in the 2011 second quarter, an improvement of $0.9 million. Cost reduction actions undertaken in the latter half of 2011 contributed significantly to this improvement. During the second quarter of 2012, the Company incurred a net loss of $0.8 million, or $0.02 per share, compared to a net loss of $1.7 million, or $0.05 per share, in the second quarter of 2011. (See "Information Regarding Non-GAAP Measures")

"While we continue to experience the effects of the difficult economic climate, especially in Europe, our quarterly results reflect continued improvement in EBITDA and a narrowing of our quarterly operating loss. While these results are in large part due to our cost management efforts, we believe that we are positioned for improving results once the overall economic environment improves," said Stanley Freimuth, Presstek's Chairman, President and CEO.

Total revenue in the second quarter was $29.7 million, a decrease of $1.7 million from the second quarter of 2011.

  • Equipment revenue increased $0.2 million, to $6.4 million, compared with the same prior year period due primarily to an increase in the number of DI units sold, including the sale of two 75DI units.

  • Consumables revenue totaled $17.6 million compared with $19.3 million for the same prior year period resulting primarily from unfavorable economic conditions in Europe as well as the continued gradual erosion of some of our legacy plate product lines. 

  • Service revenue decreased $0.2 million, to $5.7 million, compared to the prior year quarter due to lower contract revenues resulting from a decrease in active legacy equipment accounts.

Gross margin percent for the second quarter of 2012 was 28.7% compared to 31.7% in the second quarter of 2011. Lower margins were primarily the result of unfavorable consumables product mix and an increase in our per unit plate costs resulting from lower overall factory volume production.

Second quarter operating expenses, including the costs of the drupa trade show, declined $2.3 million, or 21%, to $8.8 million compared with the prior year period due primarily to lower expenses resulting from the cost reduction actions taken in the second half of 2011.

"The cost reduction actions that we undertook during the second half of 2011 have resulted in three consecutive quarters of improving operating results and adjusted EBITDA, and we continue to forecast positive adjusted EBITDA for the full year," said Arnon Dror, Presstek's Vice President, Chief Financial Officer and Treasurer. "In addition, debt net of cash, which improved from $8.8 million to $7.9 million on a sequential quarter basis, closed at its lowest level since the fourth quarter of 2010 resulting from a continued emphasis on managing working capital." (See "Information Regarding Non-GAAP Measures")

In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, the Company provides non-GAAP financial measures, including operating expenses excluding special charges; adjusted EBITDA; debt net of cash; and other GAAP measures adjusted for certain charges, which the Company believes are useful to help investors better understand its past financial performance and prospects for the future. A full reconciliation of GAAP to non-GAAP measures is provided in the supplemental financial information provided with this press release.

Management will discuss Presstek's first quarter 2012 results in a conference call on Wednesday, August 8, 2012 at 10:30 a.m. Eastern Time. Conference call information is below:

Domestic Dial In: (866) 788-0544
International Dial In: (857) 350-1682
Passcode: 16904958

Investors can access the call in a "listen only" mode via the Internet at http://www.presstek.com

In addition, for those unable to participate at the time of the call, a rebroadcast will be available following the call from 12:30 PM Eastern Time on Wednesday, August 8, 2012 until 11:59 PM Eastern Time on Wednesday, August 15, 2012.

Domestic Dial In: (888) 286-8010
International Dial In: (617) 801-6888
Passcode: 41211988

An archived webcast of this conference call also will be available on the "Investor Events Calendar" page of the company's web site.


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